The 5 Most Disturbing Bitcoin Hacks of All Time

UPDATED: May 8th, 2017

If you are professional crypto trader or just looking to buy your first bitcoin, you may want to think twice about how secure "really" is your investment? Unlike traditional currency account hacks, where banks or financial institutions will cover some or all the losses, when it comes to cryptocurrencies, there are no such guarantees. Here’s what you need to know about the 5 Biggest Bitcoin Hacks to date and WHY you need to ensure you have multiple levels of offline protection and not simply put all your trust in an online crypto exchange, no matter how much you THINK it is secure and safe. READ BELOW...

#1. Mt. Gox

When it happened: 2011 & again in 2014

The rundown: At the time of the first attack, MT Gox was the world’s largest Bitcoin exchange. This was the first big hack that showed how insecure and easily stolen Bitcoin could be.

Why it matters: This first massive breach shed light on a big problem. It became clear that while digital currency technology had a huge potential to change the world, the people behind the companies responsible for managing the transfer and storage of Bitcoin were predominantly young, unprepared and unqualified when it came to running massive finance businesses.

#2. Bitfinex

When it happened: 2016

The rundown: Drew Samsen, Applications Team Leader at Bitfinex said it best, “We know generally how it happened. It was the work of a professional (or team) over several months who expertly covered his tracks.” Very little is known about the company and very little was shared about the hack.

Why it matters: The company came up with a clever way to offset the damage. They converted the loss and converted them into their own “BFX” tokens, meant to be redeemed out of the profits the exchange made. This allowed customers who had suffered the loss to convert their token to equity in Bitfinex, effectively becoming shareholders. The company used operating profits to redeem a portion of the tokens around once a month and converted the tokens back into US dollars for the users affected by the hack. This shows the massive risks associated with digital currency trading and given that the company has never been audited by a reputable firm, the whole ordeal is still seen as quite a bit suspect…

#3. Linode

When it happened: 2012

The rundown: Linode, a cloud-hosting web provider was hacked by compromising a chain of email accounts which ultimately granted the attached access to the Linode server. The hacker stayed under the radar by renting a server to proxy close to the geographical location as the admin so the email recovery requests wouldn’t raise any red flags.

Why it matters: It showed the entire bitcoin community that storing bitcoins accessible on computers connected to the internet is simply just not safe enough.

#4. Bitstamp

When it happened: 2015 and 2016

The rundown: The Bitcoin exchange Bitstamp suffered a breach to their wallet system (a secondary hack took place a year later where another 18,866 BTC was stolen valued at USD $175,359,470 (based on current exchange rates.)

Why it matters: It yet again showed the entire bitcoin community that storing bitcoins accessible on computers connected to the internet is simply just not safe enough.

#5. Yapizon

When it happened: 2017

The rundown: Yapizon, a South Korean Bitcoin exchange suffered a massive data breach. According to the official statement from the exchange, the attack took place on April 22, 2017, when a hacker compromised four of the exchange’s 'hot' wallets. A hot wallet refers to a Bitcoin wallet that is online and connected to the Internet.

Why it matters: As if the data breach wasn’t enough to annoy users the exchange has decided to use 37% of user balances to accommodate the 37% loss in the heist. Ouch!

VUVIV is one of the world's leading official authorized reseller of crypto hardware wallets. We are a fast growing company because we always put the customer first. A customer-centered shopping experience has always been our goal and we pride ourselves in our mission to sell only PREMIUM and OFFICIALLY AUTHORIZED cryptocurrency products and accessories, that have put us in a realm above & beyond our competitors.

#1 OFFLINE "COLD" STORAGE

With almost a dozen crypto exchanges hacked and customers losing over $10B+ in BTC value, a hardware wallet is one of the greatest defenses. Your private keys are always stored offline meaning your coins are also always stored offline. As your private keys are never exposed to your computer or the internet, it greatly reduces the chance of a hacker, whether remote or local, being able to steal your coins.

#2 DATA ENCRYPTION

Most hardware wallets are fully encrypted with a PIN number and/or other form of authentication. This adds an additional layer of security. This way even if a hacker found your wallet, they will not be able to extract the private keys/seed phrases unless they also know your PIN.

#3 PC VIRUS PROTECTION

As private keys are stored on the hardware wallet, malware will not be able to find them like perhaps they could using a software wallet. Therefore, a hardware is immune to any computer viruses you may inadvertently download. In addition to that, most cryptocurrency wallets run their own operating systems so malware meant for Windows will do nothing against the operating system of the crypto wallet.

#4 VERIFY TRANSACTIONS

The latest hardware wallets requires you to confirm a transaction on your device (not the app on your computer) before any coins can be spent. This adds yet an extra layer of protection from any phishing hack.

#1 OFFLINE "COLD" STORAGE

With almost a dozen crypto exchanges hacked and customers losing over $10B+ in BTC value, a hardware wallet is one of the greatest defenses. Your private keys are always stored offline meaning your coins are also always stored offline. As your private keys are never exposed to your computer or the internet, it greatly reduces the chance of a hacker, whether remote or local, being able to steal your coins.

#2 DATA ENCRYPTION

Most hardware wallets are fully encrypted with a PIN number and/or other form of authentication. This adds an additional layer of security. This way even if a hacker found your wallet, they will not be able to extract the private keys/seed phrases unless they also know your PIN.

#3 PC VIRUS PROTECTION

As private keys are stored on the hardware wallet, malware will not be able to find them like perhaps they could using a software wallet. Therefore, a hardware is immune to any computer viruses you may inadvertently download. In addition to that, most cryptocurrency wallets run their own operating systems so malware meant for Windows will do nothing against the operating system of the crypto wallet.

#4 VERIFY TRANSACTIONS

The latest hardware wallets requires you to confirm a transaction on your device (not the app on your computer) before any coins can be spent. This adds yet an extra layer of protection from any phishing hack.

VUVIV Premium USB 3.1 to USB-C Adapter

The VUVIV USB-C Adapter is a REQUIRED accessory to connect your Trezor One to your Macbook Pro, MacBook 12-inch and other Type-C devices. Data transfer speed of up to 5Gbps and Supports USB OTG - plug in and use peripherals like a flash drives, keyboards, hubs, and mice

VUVIV Premium USB 2.0 to Micro-USB Adapter

The VUVIV MICRO-USB Adapter is compatible with most Android smartphones and tablets. Its lightweight with a durable aluminum body and supports USB OTG.

Sakura Pigma Micron 02 Archival Ink Pen

Pigma ink, invented by Sakura over 25 years ago, continues to be the most reliable permanent ink on the market today. This permanent, fade resistant, chemically stable, pigment-based ink will not bleed or run if liquids are spilled on or applied to the document after the ink has dried. In fact, it is used by museums worldwide - It's PERFECT for use with your Recovery Seed Sheet.

HURRY, YOUR OFFER ENDS IN:

I bought this item a week ago with a whole bunch of uncertainty. I thought it'd be hard to use and navigate. All my original thoughts went out the window after i easily learned how to transfer crypto currency onto the device. I am extremely happy with this product. It was recommended to me by someone. And i would most definitely recommend it to anyone looking for a secure way to store their crypto currency. ★★★★★

By Edward R. on Mar 02, 2018

Awesome product, easy to setup & use. Was able to send direct payouts from slush to Trezor w/ no issues. Product came as described & with everything as advertised in the photograph. My only beef is with the length of the USB. But I have one that is longer, so no biggie. Very satisfied with the product!! ★★★★★

Personal Thoughts: didn't expect the Trezor to be so tiny, it was quite a surprise.

By Azurite on Feb 22, 2018

This is an excellent wallet that keeps your coin safer than software wallets, or - god forbid - trusting an exchange with your fortune. It was easier to use than I anticipated: firmware and software installed easily (even on Linux), and you operate it through your PC (I thought you had to enter your PIN and passphrase on the tiny thing, but the two buttons on it are only for Yes/No decisions).

My favorite feature is that it can have hidden wallets which are encrypted with a passphrase. This way, you can have a decoy wallet with a low balance on it, and keep the stash away from anyone that asks, say, at customs. Speaking of stealth, I'm glad this device looks a little cheap, as if it was an AC remote or something, and not like it has nuclear codes on it like the Ledger Nano.

As a neat surprise value, the maker also has a password manager in the works (currently in Beta), which looks promising, and again, should be more secure than using a software-only solution. ★★★★★